Whistleblower alleges corruption in LIO court case

The state court heard oral arguments Wednesday in a case involving the contentious lease on the Legislative Information Office in downtown Anchorage.

The plaintiff, Jim Gottstein, owns the building next to the LIO and alleges financial improprieties in the lease agreement between lawmakers and the property’s landlord, which could invalidate the space’s 10-year lease.

Gottstein also argues that as a whistleblower, he should be compensated 10 percent of what’s saved if the lease is terminated. His argument is based on allegations the building overran original cost-estimates. Defense attorneys representing both the Legislature and the landlord say that claim has not been credibly established, but also insist that is not the question before the court in this case.

The Legislature’s attorney Kevin Cuddy told the judge that the claims were invalid, because Gottstein knew about the financial excesses but waited more than a year to file his claim.

“Instead of taking appropriate action, raising these questions to Legislative Affairs Agency when something could be done, he decided to get a few dollars on his own and try and get some payments for construction and related work, and then sue the Legislative Affairs Agency and the other defendants,” Cuddy said in court.

The lawsuit is separate from ongoing legislative decisions about whether to relocate from the LIO to the state-owned Atwood building a few blocks away, but both touch on accusations of wasted money and government corruption. The Legislative Council is scheduled to meet Saturday at 9 a.m. to take up the issue.

Superior Court Judge Patrick McKay is considering the case and weighing next steps. He said more than once that the topic of the LIO building is a “moving target,” with the Saturday meeting of the Legislative Council likely to affect the status of the lawsuit.